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Items on company’s bank statement The following items may appear on a bank statement: 1. Bank correction of an error from recording a $6,200 deposit as $2,600 2. EFT payment 3. Note collected for company 4. Service charge Using the following format, indicate whether each item would appear as a debit or credit memo on the bank statement and whether the item would increase or decrease the balance of the company’s account: Item No. Appears on the Bank Statement as a Debit or Credit Memo Increases or Decreases the Balance of the Company’s Bank Account

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 8, Problem 8.2BPE
Textbook Problem

Items on company’s bank statement

The following items may appear on a bank statement:

  1. 1. Bank correction of an error from recording a $6,200 deposit as $2,600
  2. 2. EFT payment
  3. 3. Note collected for company
  4. 4. Service charge

Using the following format, indicate whether each item would appear as a debit or credit memo on the bank statement and whether the item would increase or decrease the balance of the company’s account:

Item No. Appears on the Bank Statement as a Debit or Credit Memo Increases or Decreases the Balance of the Company’s Bank Account

Expert Solution
To determine

Bank Reconciliation Statement: Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

To determine:  Whether items appear as debit/credit memo on the bank statement and whether items increase/decrease the balance of the company’s account.

Explanation of Solution

In the bank records, company’s account has a credit balance. The following are items that shows increase in the company’s account.

  • Bank correction of an error
  • EFT Payment  
  • Note collected for a company

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Chapter 8 Solutions

Accounting
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